The ultimate goal of each administrator is to have a programme in which every member of the organization makes the same decisions given the same set of circumstances. It is impossible for the administrator to be everywhere a once, 24 hrs a day throughout the facility. Thus formulating policies helps in directing the activities of an employee 24 hrs a day in the facility. Properly developed policies ensure propriety and uniformity in handling patients and aid in maintaining good public relations.


A policy is the statement or general understanding which provides guidelines in decision making to members of an organization in respect to any course of action. They provide framework within which decisions must be made by the managers in different spheres.

Policies are general statements or understandings that guide managers thinking in decision making.

  • Weihrich and koontz

Policies define how the company will deal with stakeholders, employees, customers, suppliers, distributors and other important groups. Policies narrow the range of individual discretion so that employees act consistently on important issues.

– Kotler

Policies and procedures are means for accomplishing goals and objectives. Policies explain how goals will be achieved and serve as guides that define the general course and scope of activities permissible for goal accomplishment. They serve as a basis for future decisions and actions; help coordinate plans, control performance, and increase consistency of action by increasing the probability that different managers will make similar decisions when independently facing similar situations. Consequently, morale is increased when personnel perceive that they are being treated equally. Policies also serve as a means by which authority can be delegated.

Policies should be comprehensive in scope, stable and flexible so they can be applied to different conditions that are not so diverse that they require separate sets of policies. Consistency is important, since inconsistency introduces uncertainty and contributes to feelings of bias, preferential treatment, and unfairness. Fairness is an important characteristic that is attributed to the application of the policy. Policies should be written and understandable.


  • To communicate to each employee as exactly as possible what the management expects in any situation on the job.

  • To provide consistency in what employees decide in particular situations, under repetitive conditions.

Features of a policy

  1. A policy provides guidelines to the members of the organization for deciding a course of action and thus restricts their freedom of action. Policy provides and explains what a member should do rather than what he is doing.

  2. Policy limits an area within which a decision is to be made and assures that the decision will be consistent with and contributive to objectives.

  3. Policies are generally expressed in qualitative, conditional or general way. The verbs most often used in stating policies are to maintain, to continue, to follow, to adhere, to provide, to assist, to assure, to employ, to make, to produce, or to be.

  4. Policy formulation is a function of all managers in the organization because some form of guidelines for future course of action is required at every level. Policies may exist in all areas of the organization from major organizational policies to minor policies applicable to the smallest segment of the organization.


    • Policies are to be stated in writing and should be clearly understood by those who are supposed to implement them.

    • Policies should be based on the objectives of the organization

    • It should specify what is to be done

    • It prescribes limits and yardsticks for future action

    • It is reasonable and capable of being accomplished.

    • It should provide consistency in the operation of organizational functions

    • It should maintain balance between stability and flexibility


  • The key function of policy is to unify and give direction to plans.

  • Policies help managers plan by guiding operating decisions and often pre making them.

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